RIP Emptoris, 1999-2017: The End of a Procurement Software Innovator

Back to our best of 2017 articles, and two together that describe the last days of Emptoris, once one of the giants of the procurement software world ... the first article was from April.

If we go back six or seven years to the early days of Spend Matters in Europe, BravoSolution and Emptoris were two of our first major sponsors, two competing firms with strong product suites covering primarily sourcing, spend analytics and contract management.

Both were genuinely great to work with, good people, good products, and both doing pretty well in the market. Emptoris made a couple of interesting acquisitions; a German risk management firm, Xcitec and then Rivermine, a telecoms expense management business. Both seemed to address interesting niches that would appeal to procurement clients.

In 2012, IBM bought Emptoris. All looked good at first – the huge IBM customer base would be an obvious target to sell into, and the resources of the giant firm would surely help Emptoris battle with BravoSolution, Ariba (bought by SAP in 2012) and perhaps a small up and coming firm that we were just beginning to feature – Coupa.

But gradually, the doubts crept in. Good people we knew moved on either within IBM, or went elsewhere, and were not really replaced as far as we could see – Justin Sadler-Smith going last year was the last link with the “old” Emptoris for us. IBM sold Rivermine, and two of the key people from Xcitec (which didn’t seem to go anywhere under IBM) went off to found riskmethods -  now a Spend Matters sponsor and growing rapidly in the supply chain risk management world.

We met the impressive CPO of IBM, Bob Murphy, a while back, but the contact from a product development, market or just news point of view has dried up. So although Spend Matters UK did not feed into the article, we weren’t surprised to see our US team writing this a couple of weeks back -

“Spend Matters has learned that Emptoris has had multiple rounds of employee departures in recent quarters …. This includes not only commercial team members but also product management and customer support/implementation professionals, as well. (In certain cases, it appears the majority of entire teams are or will be eliminated.)

There are numerous additional considerations involved in the current situation of Emptoris and IBM that Spend Matters has heard about from multiple parties, yet has not been able to substantiate with IBM or other sources. These include the possibility (unconfirmed) that the Emptoris business unit is being positioned for divestiture to an external party. Again, these statements from our sources have not been substantiated by IBM, but have been made by multiple individuals outside the organization”.

But what has been interesting is the response from IBM, which certainly this side of the Atlantic has been – zero. You might think there would be something, or somebody saying “no, you’re wrong, let us explain why all is well in the Emptoris world”. But nothing.

We can only assume that our US article was accurate. If so, it is a shame, and whilst it is a drop in the IBM ocean, there seems to have been a destruction of shareholder value here. Going back to our initial comparison, BravoSolution has continued its strong and steady growth globally, moving into a strong position in the Middle East for instance. SAPAriba has seen strong competition from Coupa (that “small” firm) but has invested and indeed made other smart acquisitions like Fieldglass and Concur. And Coupa has grown hugely and floated.

But IBM has not evolved and developed in the way that others have. In an alternate universe, an acquisition of a business with a good P2P offering would have given IBM a full S2P suite. IBM’s technology could have led to the guys behind riskmethods doing what they’ve done and more within Big Blue. Investment in the core Emptoris product might have given Trade Extensions a run for their money in the advanced sourcing area – Trade Extensions, now to become part of Coupa of course.

Maybe we will be proved wrong and IBM has some grand master plan in this space. But at the moment, it feels like IBM have ceded this market to others.

_____

And then a few weeks later, in June ...

We featured here the news that the Emptoris product line is to be gradually phased out by IBM over coming years and IBM / SAP Ariba partnership will come into play. Emptoris customers will be encouraged to move to SAP Ariba, and there will be more development work and other initiatives between the two giant firms.

Jason Busch, founder of Spend Matters and veteran of the procurement technology market, wrote  “Emptoris: A Eulogy for a Great Company last week in response to that announcement. In what is a really great article, he looks at the history of Emptoris, and what made the firm so successful. Here is a taster.

“It’s easy for people to forget everything that Emptoris accomplished. After all, when today’s millennial category managers and analysts use a spend analytics module, field a supplier assessment or survey, conduct a supplier performance KPI assessment, run a multiround RFP, leverage sourcing optimization for the first time, use a VMS to manage contingent labor or collaborate with legal in building a contract, they are using sets of tools that Emptoris (and the companies that it acquired) often pioneered.

We all owe a big debt of gratitude to Avner Schneur (and his wife), Ralph Guanci (who I miss dearly), Kevin Potts and others who led the early charge for Emptoris. They developed, bought and sold products that were ahead of their time”.

We’d recommend that you read his whole article, but adding a few of my own thoughts, I remember first seeing “optimisation” technology being used when I helped Heinz a little with their winning CIPS Award entry back in 2004 (I think). That was Emptoris technology and I was knocked out by the way it had generated such value for Heinz.

Emptoris were then one of our very first sponsors here at Spend Matters UK/Europe in 2010, and we really enjoyed the relationship - thanks in particular to Russell Johns who was always both professional and a personal pleasure to work with (not forgetting Karen Merrill, Eric Allen, Justin Sadler-Smith and others).  When they acquired interesting firms like Xcitec and Rivermine during 2011, the firm really looked like it was establishing itself as perhaps the most dynamic and forward thinking in our industry.

And then … what has happened in recent years since the IBM acquisition might make a business school case study at some stage, but Jason has at least made sure some of the history of a genuinely innovative and important firm in our sector will be remembered and his article has already attracted a good number of comments from alumni of the firm and others. Do take a look here at his excellent full eulogy, but let’s leave our final word to him:

“For everyone involved in this journey, we won’t forget what you contributed to the great world of procurement technology. We all owe a huge debt of gratitude to Emptoris alumni and future alumni."

To everyone involved in Emptoris, I say, “Thank you. Your work has inspired a generation to embrace procurement technology in ways that we never could have imagined at the time. And it won’t be forgotten!”

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